Hello traders and investors! Let’s talk about Tesla today!
First, Tesla lost a Triangle pattern, meaning that now it is supposed to seek lower supports. The 21 ema is pointing down, indicating that the trend is bearish, and it already lost the red line at $ 833. Both, the 21 ema and the red line are supposed to work as resistances now, according to the Principle of Polarity.
Since Tesla lost the $ 833, in theory it should seek the $ 780, which is the next support level, but we must keep the daily chart in mind:
Tesla has a ceiling at the yellow area, between its previous resistances, but now it just hit the 21 ema, and historically the 21 ema works as a good support level for Tesla, and this movement is not surprising at all, as we already talked about it in my previous analysis, when Tesla was at the All Time High back in Jan 26 (the link to this analysis is below, as usual).
It seems Tesla can’t go up, but it can’t drop either and when this happens, we see congestion. It has been a month since Tesla is not trending, just moving sideways, doing nothing meaningful.
But Tesla must not lose the $ 780, as there is the possibility of a H&S chart pattern here, and the target would be the $ 695. Let’s monitor Tesla closely from now on, as it seems it is at a decisive point. Remember to follow me to keep updated and support this idea if you liked it!
So far from its' all-time high 900.25, a full 5 waves up with a fractal of a 5th within a very extended wave 5 became terminal triangle thrust that ended well below the consensus exuberant estimate between 945 to 1000+, it has subsequently made a pattern of lower highs 895.50, 880.50, 877.77. Today's low 800.02 so far is above 780.10 low off the all-time high. A break of 780.10 will probably uncover much lower support down to $540-566 area, $400 +- $20 underneath that. However, I can't help but to notice a potential double Zigzag pattern at today's low with a truncated Y low, conceivably Y usually comes under W (780.10). Only time will tell if its's a double Zigzag correction or the beginning of a larger bear market. It has already retraced to the base + of the triangle that is normal behavior for post triangle thrust aftermath.
Piperchap
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I think $780 holds, it’s Tsla and Bitcoin is bullish right now. I don’t use Elliot wave fully either but I believe there is one more wave up before a bigger correction.
foxbelex
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Hi Nathan,
let me ask you something:
if the actual bottom of $780 holds, does that mean that the ATH or yellow line will be retested?
peff_
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I saw the Head and Shoulders pattern as well. Dont forget about the 3 gaps to fill down to 700 as well. Seems more reason to be bearish on tesla now that they have 1.5B in BTC. If BTC drops even another 5% in a short time frame, that could be enough to ignite more Tesla shareholders to sell.
Nathan_Black
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@wyb28480, If you are talking about the daily chart, then you are right! This is usually a bearish sign, but we must wait it to be triggered. Then the gaps are the target, as you said.
Thanks Wyb!
Trade well.
pechi123
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By the way that couldn't possibly be a triangle, it violates every rule of Elliott Wave concerning triangles where and when they form, and their structure. Try reading Elliott Wave Principle pgs 50-52.
Nathan_Black
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@pechi123, Hey Pechi! Well, the fact is, the purple lines are a triangle, and we had a strong breakout from it.
And I already read this book, and others about Elliot Waves, but I simply choose to not use it in my trading style (although I used it in the past, when I was still developing myself as a trader). I use other techniques, therefore you'll never see me talking about Elliot Waves.